SANAA (Reuters) - Yemen has started negotiations with kidnappers holding a German family and a Briton hostage, a top Yemeni official said on Tuesday, and violence flared in a northern corner where Shi'ite rebels are staging a revolt.
The announcement of talks came a day after German Foreign Minister Guido Westerwelle said in Sanaa that Yemeni authorities had located the German couple and their three children, without saying where.
"The negotiations are now going on with the kidnappers of the German and British hostages," Yemeni Foreign Minister Abubakr al-Qirbi told a news conference.
Yemen, the Arab world's poorest nation, came to the foreground of U.S.-led efforts to battle militancy after a Yemen-based wing of al Qaeda said it was behind a failed December 25 plot to bomb a U.S.-bound airliner.
The United States and Saudi Arabia fear al Qaeda will take advantage of Yemen's instability to spread its operations to the neighboring kingdom and beyond. Yemen itself produces a small amount of oil.
Washington does not plan to send U.S. troops to Yemen, President Barack Obama said in remarks published on Sunday. U.S. military operations in Yemen are sensitive because they could fuel support for al Qaeda.
Qirbi said Washington believed Yemeni forces were best placed to combat a resurgent al Qaeda in Yemen, the ancestral home of the network's leader Osama bin Laden.
Most foreigners abducted by Yemeni tribal groups to press the government to meet local demands have been freed unharmed. However, gunmen killed two Belgian women in 2008 in an ambush authorities blamed on al Qaeda.
The German family and the Briton were among a group of nine foreigners kidnapped in the northern region of Saada, where Shi'ite "Houthi" rebels are fighting government troops. The rebels have denied they were responsible.
Three women from the group -- two Germans and a South Korean -- were later found dead.
Germany's mass-selling Bild newspaper cited an unnamed government official on December 23 as saying the German government had received a video which showed the three children, aged between one and five years, alive but looking exhausted.
Yemeni forces killed 19 rebels in a military operation to rid Saada's old city of Shi'ite rebel hideouts, the government said, and the insurgents said their civilian population was the target of a deliberate campaign of deadly violence.
Security forces mounted house-to-house sweeps in the old city of Saada, where Shi'ite rebels were hiding in homes, the Interior Ministry said on its website. Some 25 were arrested, it said.
It did not say if there were any civilian casualties.
The operation, dubbed "Blow to the Head," was continuing against rebels who have fought Yemen's government since 2004, complaining of social, economic and religious marginalization. The government did not say when the sweeps began.
As well as its fight against the Shi'ite rebels, the government also faces separatist sentiment in the south and is fighting a resurgent al Qaeda in several provinces. The Shi'ite revolt drew in Saudi Arabia after a cross-border rebel raid into the world's biggest oil exporter in November.
Rebels from the minority Shi'ite Zaidi sect have said they were the target of a series of Saudi air strikes in recent days, and that their positions were also frequently pounded by mortars by Yemeni forces.
Rebel leader Abdul-Malik al-Houthi accused his enemies, whom he did not name, of intentionally targeting civilians as a means of pressing for an end to their fight.
"It is clear, brothers, that the enemies made the targeting (of) civilians a basic strategy, and are trying through that to pressure us because they know our humanity and morals and our pain for our civilians," rebel leader Houthi said in a statement posted on a rebel website.
He cited a series of strikes in December that he said killed more than 50 women and children, and said civilians had been attacked previously in their homes, markets and mosques by U.S., Saudi and Yemeni planes in what he termed a "joint aggression."
"I call on you again to stop targeting civilians and stop your crimes against women and children. If you have a desire or intent to fight us ... then fight us with honor so as to retain a minimum of your humanity," Houthi said.
The conflict in Yemen's mountainous north has killed hundreds and displaced tens of thousands.
Reporting by Mohamed Sudam; Writing by Cynthia Johnston; Editing by Ralph Boulton